Bill Williams Fractals Filtered by the Alligator Indicator

Summary

This document explains an indicator that marks Bill Williams fractals on a price chart. A buy fractal is a local high formed when the center high is above the highs of at least two bars on each side; a sell fractal is the inverse pattern around a local low. The indicator marks these levels with arrows and allows the number of bars considered on either side to be set.

It recommends filtering fractal signals with the Alligator indicator: a buy setup should not be taken when its fractal is below the Alligator's teeth, and a sell setup should not be taken when it is above them. A signal is treated as active based on its relation to the Alligator's jaws and remains so until price reaches it or a newer fractal appears. The text describes the indicator's construction and signal rules but supplies no testing or performance evidence. Fractals are pattern-based signals, so the note does not establish their reliability across markets or timeframes.

Key ideas

• A fractal identifies a local high or low using bars on both sides of the center bar.
• The indicator draws fractal levels at the corresponding high or low.
• The Alligator's teeth are used to filter buy and sell fractals.
• A signal remains active until it is reached or replaced by a newer fractal.
• The document gives signal rules but no empirical performance results.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.